Police said that though the investigation was complete, there was insufficient evidence to prove the cake was the source of the cannabis.
"While Police believe it is highly likely that these people were served a cake that was laced with cannabis, there is insufficient evidence to prove this," sergeant Sally McBride said.
"The people involved underwent tests, which confirmed the presence of cannabis. Unfortunately, at the time of reporting no cake was seized for examination."
The restaurant's owner told the Nelson Mail the allegations were not true, but that he would now freeze a sample of every cake made by the restaurant as a preventative measure.